Foreign airlines‘$800m trapped in CBN, says BA chief

Following the scarcity of dollars in the country, British Airways Commercial Manager, West Africa, Mr. Kola Olayinka, has said that about $800 million owned by foreign airlines was s trapped with the Central Bank of Nigeria (CBN) since last year October.

Olayinka disclosed this while speaking on the topic “Dollar Scarcity: Challenge for Airlines” during the Aviation Round Table Quarterly Breakfast Meeting at Goldview Hotel ,Ikeja, Lagos today.

He noted that the scarcity of dollars was affecting both local and international airlines drastically, adding that it has become a general problem that was affected every sectors in the country.

Foreign airlines normally save their monies on the Billing Settlement Plan (BSP) with the Central Bank of Nigeria (CBN) in naira while the apex bank in turn remits such funds in dollars to them whenever they want to repatriate such funds to their country.

According to him, the situation had created uncertainty which was beginning to take a toll on most airlines with their businesses experiencing down turn and losses.

Olayinka said: ”At the height of this dollar scarcity, all the airlines had about $800 million that has been trapped with the CBN. For every $US1million, we lose N80million and this is one of the major reasons why Iberia and United Airline pulled out of the country”.

He said further that British Airways had since deployed a Boeing 777 aircraft on the London- Lagos route and well as reduce some of its frequencies, adding that since the problem began there had been artificial scarcity of seats on most airlines.

“The effect of scarcity of dollars is not only affecting us as airlines but also, the government will be losing revenue because there are charges accruing to government such as $20 which goes to government for security, $50 for each passenger and 5% of the fare as tax and all these go to the government “he added.

Speaking in the same vein , Chief Executive Officer, Aero Contractors, Captain Fola Akinkuotu pointed out that the scarcity of dollars was also affecting local airlines in the aviation industry.

He stressed that maintenance cost was normally paid in dollars because most of the spare parts needed for repairs could only be bought abroad.
According to him, some expatriates in the country working for domestic airlines were also paid in dollars ,adding that scarcity of dollars was making things difficult for airline operators.